I had a Canadian based contractor that flew over to California for a week, performed services in California, then flew back to Canada when he was done. What tax forms do I need to fill? I also paid him the full amount without withholding any taxes? Is that ok?
Thank you very much.
If this foreign-based contractor performed personal services for you (e.g. home decorating, remodeling, landscaping, etc.), there is no requirement for you to report the payments.
From Instructions for Forms 1099-MISC and 1099-NEC (2020) - "Report on Form 1099-MISC only when payments are made in the course of your trade or business. Personal payments are not reportable."
Withholding tax is another issue. If the contractor provides a completed Form W-8 ECI , then you do not have to withhold tax on the payment.
Otherwise, withholding is normally required on any payments for independent personal services performed by a foreign individual (while present in the U.S)..
See Who Must File Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding for additional information.
Hi @ToddL99 ,
Thanks for the response. This service is performed for my small business. Is 1099-MISC relevant for non-US citizens /resident contractors? I heard they fill out a W-8BEN form? Not sure whats the relationship between these forms...
Forms 1099-MISC (and 1099-NEC) do not apply to non-U.S. citizens or non-resident aliens performing services for compensation while in a foreign country.
Form W-8BEN is used to certify that an individual is not a U.S. citizen or Resident Alien, and payments they receive for services performed in a foreign country are not subject to 30% withholding.